Q10 with qwerty keyboard seen as lure to majority of BlackBerry's 76M users

BlackBerry needed to produce an updated qwerty device for its faithful base of 76 million subscribers, but it remains to be seen whether the Q10 will make serious inroads in reversing BlackBerry's decline.

In interviews, several analysts said BlackBerry needed to produce an updated qwerty device for its faithful base of 76 million global subscribers, although they don't generally believe the Q10 will make serious inroads in reversing BlackBerry's decline.

BlackBerry, as expected, sees it another way.

"I think there is a massive pent-up demand for a physical keyboard product," said Michael Clewley, director of handheld software product management for BlackBerry, in an interview. "There are some diehards" who like a qwerty keyboard, he said.

BlackBerry is also counting on a number of government agencies to buy the Q10 for their employees, he said.

The overwhelming majority of smartphones sold use touchscreen keyboards, including the BlackBerry Z10, the iPhone 5, the Galaxy S III and the soon-to-launch Galaxy S4, analysts said.

But Clewley said 80% to 90% of BlackBerry's 76 million global subscribers are already on BlackBerry qwerty devices, such as the qwerty-based Curve 8520 Gemini, and others. Most of those devices are at least two years old and ready for an update.

The Q10 sports an updated browser and runs the BlackBerry 10.1 operating system with other improvements that were first seen on the Z10, Clewley said. All the major U.S. carriers are expected to sell the Q10 in late May for a suggested price of $249 under contract, BlackBerry said this week.

One big downside to using a qwerty device like the Q10 is that the physical keypad cuts into the size of the touchscreen, which is increasingly important for viewing video and playing games.

The iPhone 5 jumped to a 4-in. screen after staying at 3.5-in. for previous versions, while the Galaxy S4 will have a 5-in. display. Meanwhile, the Q10's touchscreen will be just 3.1-inches, a 25% reduction from the size of the 4.2-in. touchscreen in the Z10.

But that smaller screen hasn't been a drawback to some qwerty faithful who have used the physical keyboards from BlackBerry for years and have tried the touchscreens, but haven't liked them.

One random BlackBerry qwerty user in Harrisonburg, Va., who gave her name only as Mary, pulled out an old Curve device for a reporter and showed how fast she could type with two thumbs on the physical keyboard. She was curious to know when the Q10 would be available and said she hasn't liked touchscreens.

"I really like the keyboard," she said.

Several analysts said they hear the woman's sentiment all the time, mainly from BlackBerry users, although there is also a core group of younger qwerty users on other platforms, such as the now-rare Sidekick, a horizontal slider with a physical keyboard that is especially useful for texting -- especially among young smartphone users.

BlackBerry originally made its reputation with various qwerty keyboard handhelds. It also largely failed with the BlackBerry Storm, a full touchscreen device introduced in late 2008, analysts said.

"The Z10 has only had moderate success so far, and there is still a large base of BlackBerry users who want to upgrade to BlackBerry 10 OS and have been waiting for a qwerty version in the Q10," said Kevin Burden, an analyst at Strategy Analytics.

Of the 76 million BlackBerry users worldwide, Burden said he'd be surprised if many are using the Storm. He said the vast majority of the BlackBerry users are indeed using older qwerty devices.

Rob Enderle, an analyst at Enderle Group, said it was a "huge mistake" for BlackBerry to produce the touchscreen Storm device to imitate the iPhone "because BlackBerry's own unique design had been so successful and the text-centric behaviors driving that design really hadn't changed that much, certainly not for loyal BlackBerry users anyway."

In fact, Enderle said touchscreen phones require more of a user's attention and have contributed to texting-while-driving safety problems. "Physical keyboards are still preferred for mobile computers and are perceived to be faster than screen keyboards," Enderle said. "Even iPads have a very high keyboard-attach rate."

The Q10 is the kind of product that BlackBerry had to produce, Enderle said. "For BlackBerry, physical keyboard users represent BlackBerry's most loyal segment of users, and keeping that group happy is core to BlackBerry's survival as a company," he said.

When asked if the Q10 might catch on with non-BlackBerry customers on other smartphone platforms, the analysts were doubtful.

At a suggested price of $249 with a two-year contract, the price for the Q10 will be too high for young texters, said Carolina Milanesi, an analyst at Gartner. "Qwerty has been successful for heavy texters and emailers," she said. "I believe there still is a market for qwerty in both emerging and mature markets, but this is not all up for grabs for BlackBerry alone."

Milanesi said business users "still want a qwerty, but that is not a big enough market for BlackBerry to guarantee a comeback."

Jack Gold, an analyst at J. Gold Associates, estimated that 15% to 25% of the smartphone market is primarily email-oriented and would be interested in a qwerty device.

"Get on the plane and look at all the businesspeople still hanging on to hardware keyboard devices," he said. "I do think there will be a ready base of users on BlackBerry wanting to upgrade. But will that be the majority of the market? Probably not."

Even if the Q10's price isn't low enough to attract young texters, there are at least four more phones coming in 2013 from BlackBerry, and some of those could feature qwerty designs at lower prices, Burden said.

Nokia on Wednesday introduced the qwerty Asha 210, with a 2.4-in. screen that is integrated with social networking features. With a street price of $72, it falls into the category of an "advanced feature phone," not a full smartphone, with its powerful processor and other features.

Burden said it's unlikely BlackBerry can build a young clientele with low-cost qwerty texting devices overnight, although he said BlackBerry Messenger is becoming a full-functioning social network that could lure more users to BlackBerry.

Clewley said the phone maker plans to talk more about BlackBerry Messenger at its BlackBerry Live event in May. HE noted that BBM is popular in Europe and has moved beyond an instant messaging app to include instant videoconferencing and voice conferencing in the BB 10 devices.

"BBM is already viewed as BlackBerry's social network," Burden said. Sales of the Q10 and future qwerty BlackBerry devices could be helped by greater interest in BBM, he said.

"But BBM won't get bigger until you can download it to iOS and Android," Burden said. "SMS never took off until it was interoperable on all networks. BBM on some BlackBerry devices will stay a niche until the time it becomes an application on other platforms."